Covid-19

Jose Maria Barrero, Nicholas Bloom, Steven Davis, 23 September 2020

The COVID-19 pandemic triggered a sudden, massive shift around the world to working from home. While there is great concern how this will affect inequality and how the economy will adjust, the shift has also saved billions of hours of commuting time in the US alone. Drawing on original surveys, this column estimates that the shift to working from home lowers commuting time among Americans by more than 60 million hours per workday. Americans devote about a third of the time savings to their primary jobs and about 60% to other work activities, including household chores and childcare. The allocation of time savings differs substantially by education group and between persons with and without children at home.

Titan Alon, Matthias Doepke, Jane Olmstead-Rumsey, Michèle Tertilt, 22 September 2020

Unlike any other modern recession, the downturn triggered by the Covid-19 pandemic has created larger employment losses for women than for men. Based on data from all US recessions since 1949, this column shows that the 2020 recession deviates most sharply from the historical norm in its disparate gender impact. The fact that job losses are much higher for women not only matters for gender equality, but will also reduce families’ ability to offset income losses, producing a deeper and more persistent recession.

Oriol Aspachs, Ruben Durante, José García-Montalvo, Alberto Graziano, Josep Mestres, Marta Reynal-Querol, 22 September 2020

The economic crisis from the COVID-19 pandemic may disproportionately affect the most vulnerable segments of the population, creating serious challenges for social cohesion and political stability. This column constructs a high-frequency measure of income inequality using anonymised data from bank records on the wages and public transfers of over three million account holders in Spain. Wage inequality increased by almost 30% during the COVID-19 crisis, mainly due to job losses and wage cuts for low-income workers. However, public transfers were very effective at offsetting most, though not all, of this increase.

Yoseph Getachew, 22 September 2020

During the COVID-19 pandemic, policymakers have often relied on epidemiology models to track the spread of the outbreak. However, such models lack the necessary tools to account for individual behaviour potentially influencing the dynamics of the pandemic. This column integrates individual economic decision-making and voluntary social distancing into these models. It argues that voluntary social distancing is important for both flattening the infection curve and minimising economic damage. Although government-enforced social distancing is much more effective in flattening the curve, it comes at a higher cost to the economy.

Jacek Rothert, Ryan Brady, Michael Insler, 22 September 2020

While individual states in the US decide their own lockdown policies, they are not able to restrict travel across their borders. A lax policy in some states can thus exacerbate the outbreak in other states. Drawing on recent research and county- and state-level US data, this column examines just how big the problem is. It finds that epidemiological spillovers across the US states are substantial and lax policies in the most lenient states translate into millions of additional infections in other parts of the country in the long run.

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